The Bankers' Books Evidence Act, 1891: An Analytical Study of its Evidentiary Regime in India

The Bankers' Books Evidence Act, 1891: An Analytical Study of its Evidentiary Regime in India

Introduction

The Bankers' Books Evidence Act, 1891 (hereinafter "BBEA" or "the Act") is a significant piece of legislation in India that governs the admissibility of entries in bankers' books in legal proceedings. Enacted with the primary objective of obviating the need for banks to produce their original books of account in court, thereby preventing inconvenience to banking operations, the Act provides a mechanism for submitting certified copies of such entries as prima facie evidence. This article undertakes a comprehensive analysis of the BBEA, examining its key provisions, judicial interpretations, and its interplay with other evidentiary statutes, particularly the Indian Evidence Act, 1872. It draws upon a range of judicial pronouncements from the Supreme Court and various High Courts to elucidate the scope, application, and limitations of the Act in the Indian legal landscape.

Defining "Bankers' Books" and "Certified Copy"

The applicability of the BBEA hinges on the precise definitions of crucial terms, primarily "bankers' books" and "certified copy."

"Bankers' Books"

Section 2(3) of the BBEA defines "bankers' books" to include "ledgers, day-books, cash-books, account books, and all other books used in the ordinary business of a bank."[1] This definition is inclusive and has been interpreted to cover various forms of records maintained by banks in their regular course of business. The Supreme Court in Central Bureau Of Investigation v. V.C Shukla And Others, while dealing with admissibility of unconventional accounting records, referred to precedents like Mukundram v. Dayaram which defined "book" and differentiated between books of account and unbound sheets, noting that spiral notebooks and pads could qualify as "books."[2] The Allahabad High Court in Raghu Raj Pratap Singh And Others v. Assistant Commissioner Of Income-Tax reiterated the statutory definition.[1] Notably, in CIT v. Bhaichand H. Gandhi, cited in the same judgment, it was held that a passbook supplied by a bank to its customer is a copy of the customer's account in the bank's books and not a book of the assessee.[1] The Prevention of Corruption Act, 1947, also adopts the BBEA's definitions for 'Bank' and 'bankers' books'.[3]

"Certified Copy"

For an entry from a banker's book to be admissible under the BBEA, it must be presented as a "certified copy." Section 2(8) of the Act meticulously defines a "certified copy" as:

"...a copy of any entry in the books of a bank together with a certificate written at the foot of such copy that it is a true copy of such entry, that such entry is contained in one of the ordinary books of the bank and was made in the usual and ordinary course of business, and that such book is still in the custody of the bank, and where the copy was obtained by a mechanical or other process which in itself ensured the accuracy of the copy, a further certificate to that effect, but where the book from which such copy was prepared has been destroyed in the usual course of the bank's business after the date on which the copy had been so prepared, a further certificate to that effect, each such certificate being dated and subscribed by the principal accountant or manager of the bank with his name and official title."[4]

This definition underscores the stringent requirements for certification, aimed at ensuring the authenticity and reliability of the copies. The Orissa High Court in State Bank Of India v. Ramayanapu Krishna Rao And Others elaborated on these requirements, emphasizing the need for the certificate to be appended by the concerned Branch Manager and to attest to the specified conditions.[4] However, the Bombay High Court in MRS. SULEKHABAI Y. CHOWGHULE v. SHAIK VAHID JAHANGIR ALIAS SHAIK VAID AND 6 ORS., while acknowledging the definition in Section 2(8), suggested that the absence of a certificate as contemplated might not be fatal if other evidence substantiates the transaction, citing State Bank of India Vs. Yumnam Gouramani Singh for the principle of substantial compliance.[5]

Admissibility and Evidentiary Value of Certified Copies

The cornerstone of the BBEA is Section 4, which deals with the mode of proof of entries in bankers' books. It states:

"Subject to the provisions of this Act, a certified copy of any entry in a banker's book shall in all legal proceedings be received as prima facie evidence of the existence of such entry, and shall be admitted as evidence of the matters, transactions and accounts therein recorded in every case where, and to the same extent as, the original entry itself is now by law admissible, but not further or otherwise."[6]

This provision grants certified copies the status of prima facie evidence. The Delhi High Court in Punjab & Sind Bank v. Ram Prakash Jagdish Chander observed that such a certified copy "does not require proof by production of cheques and vouchers etc., relating to each entry. The object of the Act is to render the entries in bankers' books admissible in evidence and to enable copies of the entries to be used instead of compelling the Bank to produce the original entries."[7] Several Debts Recovery Tribunal (DRT) cases also affirm that certified copies of statements of account are admissible and taken as correct, particularly if unchallenged.[8][9][10]

Interplay with Section 34 of the Indian Evidence Act, 1872

While Section 4 of the BBEA makes certified copies prima facie evidence, its evidentiary value must be understood in conjunction with Section 34 of the Indian Evidence Act, 1872. Section 34 states that entries in books of account, regularly kept in the course of business, are relevant, but "such statements shall not alone be sufficient evidence to charge any person with liability."

The Supreme Court in Chandradhar Goswami & Others v. Gauhati Bank Ltd. extensively analyzed this interplay. The Court held that while certified copies under Section 4 of the BBEA are admissible as prima facie evidence of the existence of original entries, they do not, by themselves, fasten liability if the transaction is denied.[11] The Court observed:

"In the face of the positive case made out by Chandradhar that he did not ever borrow any sum from the Bank, the Bank had to prove the fact of such payment and could not rely on mere entries in the books of account even if they were regularly kept in the course of business in view of the clear language of Section 34 of the Act. This Court further observed that where the entries were not admitted it was the duty of the Bank, if it relied on such entries to charge any person with liability, to produce evidence in support of the entries to show that the money was advanced as indicated therein and thereafter the entries would be of use as corroborative evidence."[12] (as cited in CBI v. V.C. Shukla)

This principle was reiterated by the Supreme Court in Central Bureau Of Investigation v. V.C Shukla And Others. The Court emphasized that the rationale behind the admissibility of books of account is their trustworthiness due to regularity and difficulty of falsification, but the "additional safeguard of insistence upon other independent evidence to fasten him with such liability, has been provided for in Section 34."[2] Thus, while the BBEA facilitates the proof of entries through certified copies, the substantive requirement of corroboration under Section 34 of the Evidence Act, especially when liability is contested, remains paramount. The Allahabad High Court in Dinesh Kumar Syal v. Bhagirath Gramin Bank also cited Chandradhar Goswami to assert that mere entries or copies are insufficient to charge a person with liability unless the correctness of entries is accepted.[13]

The principle of presumptions, as discussed in Kundan Lal Rallaram v. The Custodian, Evacuee Property Bombay in the context of the Negotiable Instruments Act, 1881,[14] finds a parallel here. Section 4 of the BBEA creates a rebuttable presumption. The burden of disproving the prima facie evidence lies with the party against whom it is invoked. However, this presumption pertains to the existence and content of the entry, not necessarily to the automatic imposition of liability arising from that entry without further proof if disputed.

Procedural Aspects and Safeguards

Inspection of Bankers' Books

Section 6 of the BBEA empowers a court or judge to order inspection of bankers' books for the purpose of any legal proceeding. However, this power is not unfettered. The Kerala High Court in Kattabomman Transport Corporation Limited v. State Bank Of Travancore, Trivendrum And Others, relying on the Full Bench decision of the Bombay High Court in Central Bank of India v. Shamdasani, laid down important precautions:[15]

  • Notice must be given to the bank before any inspection is ordered.
  • Before such notice, the court must arrive at a prima facie conclusion that the facts of the case justify an inspection.
  • The court should not order inspection as a matter of course to prevent abuse, for instance, by business rivals.

The Bombay High Court in P.D Shamdasani (Original Complainant), v. Sir Hugh Goldiwg Cooke And Others also dealt with an application for inspection under Section 6 of the BBEA, highlighting the procedural engagement required.[16]

Production of Documents

Timely production of certified copies is also a relevant procedural aspect. The Patna High Court in Sudhir Kumar Pandey v. Bank Of India And Others noted that while a certified copy under Section 4 of the BBEA is prima facie evidence, if such a document is produced at a later stage of the case and was required to be filed with the plaint (under Order VII Rule 14 of the Code of Civil Procedure, 1908), an adverse inference might be drawn.[17] This underscores the importance of adhering to general procedural laws governing evidence presentation.

Duty of Parties

The Delhi High Court in Punjab & Sind Bank v. Ram Prakash Jagdish Chander also pointed out that defendants have a duty to point out discrepancies in the statement of account if they dispute its correctness.[7] This aligns with the general principle that a party in possession of special knowledge regarding certain facts has a burden to explain them, a principle embodied in Section 106 of the Indian Evidence Act, as discussed in State Of Rajasthan v. Kashi Ram, albeit in a criminal context.[18]

Modern Considerations: Privacy and Technology

The BBEA, enacted in the 19th century, continues to be relevant in the digital age. The definition of "certified copy" in Section 2(8) includes copies obtained by "a mechanical or other process which in itself ensured the accuracy of the copy,"[4] which can be interpreted to encompass modern reproduction techniques. The Information Technology Act, 2000, has also amended the BBEA to bring electronic records within its ambit, although the provided reference materials do not extensively cover these amendments.

A significant modern consideration is the right to privacy. The Supreme Court in K.S. Puttaswamy And Another v. Union Of India And Others, in its landmark judgment on the right to privacy, noted that the BBEA "confers statutory protections against inspection and dissemination of bankers books".[19] This highlights the Act's role not only in facilitating evidence but also in implicitly recognizing and protecting the confidentiality of banking records, allowing disclosure only under defined legal procedures.

The practical application of the BBEA in contemporary litigation is evident from cases like Mitsui Osk Lines Ltd. v. Orient Ship Agency Pvt. Ltd., where the Bombay High Court directed a bank to provide certified copies of account statements along with a certificate under the BBEA.[20]

Conclusion

The Bankers' Books Evidence Act, 1891, remains a vital statute in the Indian legal system. It successfully balances the need for efficient judicial proceedings by allowing certified copies of bank records as prima facie evidence, with the operational exigencies of banking institutions. The judiciary has consistently interpreted its provisions to ensure that while the mode of proof is simplified, the fundamental principles of evidence, particularly the requirement of corroboration under Section 34 of the Indian Evidence Act when liability is contested, are upheld. The Act also incorporates safeguards, such as the conditions for inspection and the stringent requirements for certification, to prevent misuse.

As banking transactions become increasingly complex and digitized, the BBEA, read with subsequent amendments and judicial interpretations, continues to provide a foundational framework for the admissibility of banking records. Its enduring relevance is a testament to its well-conceived objectives and the judiciary's role in adapting its application to evolving legal and technological contexts, including the growing emphasis on privacy rights.

References